In detailed comments submitted (April 10, 2025) to the U.S. Treasury, the Renewable Fuels Association urged the department to clarify and improve several key provisions in its upcoming proposed regulations for the Clean Fuel Production Tax Credit, often referred to as the “45Z credit.” The comments were submitted in response to the Treasury’s January 10 “notice of intent to propose regulations” for 45Z.
“If properly implemented, the 45Z tax credit has the potential to advance U.S. energy security, prioritize domestic energy resources, strengthen rural economies, and create a transformative incentive for the adoption of new technologies in the renewable fuels and agriculture sectors,” RFA President and CEO Geoff Cooper wrote to Treasury Secretary Scott Bessent. “The technology-neutral intent of 45Z represents the most economically efficient and environmentally responsible approach to boosting U.S. energy production. However, for the 45Z program to truly drive innovation and value creation in the marketplace, Treasury must move expeditiously to propose, finalize, and promulgate implementing regulations. Clean fuel producers, including RFA’s members, are in desperate need of clarity, certainty, and stability in the regulatory framework supporting the 45Z tax credit.”
Cooper added that RFA believes the final 45Z regulations must recognize the realities of today’s biorefining and agriculture sectors and the complexities of our nation’s transportation fuels marketplace. At the same time, final regulations must maintain an intuitive and manageable approach to registration, reporting, and recordkeeping that creates the kind of dependable value that empowers businesses to invest.
Among RFA’s comments:
- Treasury needs to clarify its intentions and definitions around “qualifying sale,” an “unrelated person,” a “member of a consolidated group,” and the applicability of safe harbor provisions.
- Treasury’s approach to rounding of emissions factors should be reconsidered.
- Treasury should formally integrate climate-smart agriculture (CSA) practices into the 45Z program.
- Treasury should modify Prevailing Wage and Apprenticeship (PWA) requirements.
- Treasury should expeditiously implement the Provisional Emissions Rate (PER) process and allow a more flexible approach.
- The short duration of 45Z, and Treasury’s delay in promulgating rules, is discouraging innovation and investment and undermines the objectives of the program.
- The proposed structure for 45Z creates an unintended disincentive for the production of alcohol-to-jet (ATJ) sustainable aviation fuel (SAF).
In response to specific questions from Treasury, RFA commented that the 45ZCF-GREET model offers a far more current and thorough understanding of lifecycle emissions than either CORSIA or the approved pathways under the RFS program. Also, Treasury should include emissions rate pathways for biofuel derived from corn kernel fiber and sorghum kernel fiber and provide the option to segregate those gallons for 45Z credit generation purposes.
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